On Friday, former Qwest
In other words, it's all over but the orange jumpsuit.
But Nacchio has it easy. Former Tyco
We know why. Whereas Ebbers, Kozlowski, Skilling, and Lay were convicted of engineering multibillion-dollar frauds, Nacchio is a small fish. All he did was pump and then dump $52 million in stock. He'll have six years of floor-scrubbing to think about whether that was a good idea.
Investors, meanwhile, have been handed a gift. Call it a crystal-clear case study in how hype can destroy your portfolio.
You read that right. Hype. During the 35 days in 2001 when Nacchio made 19 illegal insider stock sales, Qwest pumped out -- get this -- 40 press releases, including some meaningless drivel about a new customer-care center in Cheyenne, Wyo.
Take it from a former PR guy; press releases only ever have two purposes. Either they're intended to inform, or they're intended to boost valuation. I'm not at all sure a new customer care center in Cheyenne would boost the stock price, but on the other hand, do we investors really need to know about it?
When I see releases like this, I imagine Nacchio screaming "BUY! BUY! BUY!" at the top of his lungs -- all the while holding fast to the "sell" button.
Sure, Nacchio was greedy. Yes, he was a thief. But he was also stealing in plain sight -- the unique crook who told you he was stealing from you even as he thumbed through the cash in your wallet. Those press releases were his calling card.
Jurors say Nacchio is guilty of illegally selling stock. I say Nacchio is guilty of being a moron. Of hyping a stock that never should have been hyped. Of abandoning all sense of competent management in Qwest's quest for riches.
But now we've seen the con. We know how it works. And we needn't ever be victims of this sort of shameless hype ever again. For all of that, Jumpsuit Joe deserves our anger, our pity, and (remarkably) our thanks.
Fool contributor Tim Beyers calls suburban Denver home. He's happy for his neighbors, too many of whom are Qwest retirees. Tim didn't own shares of any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. Having cleaned up its act, Tyco is a Motley Fool Inside Value recommendation. The Motley Fool's disclosure policy finds orange unflattering.